[Author’s note: this article was first published in June, 2003.]

Search engine marketing (“SEM”) – the process of ensuring that people can easily find your company using sites like Google and Yahoo! – has emerged as a critical component of effective marketing strategies. SEM is the art of making sure that interested prospects can find your web site easily, no easy task given the five billion web pages exist. And the stakes associated with being prominent online are high and growing. According to The Wall Street Journal, “more and more companies doing business online find that the best way to reach prospective customers is through their web searches.”

What is Search Engine Marketing (SEM)?

SEM is the process of gaining visibility for your web site on search engines. The process includes optimizing a web site for search engine crawlers, managing paid listings and inclusions, submitting to directories, and any other search engine-related marketing activity.

Search engines and directories are important because customers and prospects use them to identify companies and conduct research about the vendors they work with. According to Forrester Research, up to 80% of all web site traffic is generated by search engines. And Nielsen/NetRatings reports that more than 100 million people in the U.S. are active internet users now, and this group has become increasingly comfortable using search engines to find companies and information on the web.

For details about the nuts and bolts about how search engines work, click here to view a Pixel Bridge Briefing article that explains the technology.

How SEM Has Evolved

SEM has become much more important for companies of all shapes and sizes since we last addressed the issue eighteen months ago. Since then, the internet user population – especially the “experienced” group – has expanded significantly, and the search engine landscape has evolved and consolidated. The results: internet users are more savvy, have more confidence in their online research skills, and the search engines have refined accordingly to meet advanced user needs. Today’s search engines use advanced algorithms to evaluate sites/pages for inclusion and offer a litany of options to organizations seeking favorable placement.

Over the past year, SEM has become a proven best practice for marketers looking to increase the visibility of their organizations on the internet – no matter what the specialty. Search engine users are valuable, motivated and ready customers. Company web sites that are front-and-center on search engines gain a formidable competitive advantage in the battle for new customers. High placement on search engines validates companies and promotes trust among prospective customers.

SEM has emerged as a top three component of an integrated online marketing strategy, along with an effective web site and email marketing. (To learn about the components of an effective internet strategy, click here.) There are no silver bullets, but when working together, a company web site, email marketing, and SEM can provide powerful marketing and sales support to an organization pursuing revenue growth.

An Inexact Science

Though SEM has evolved in recent months, it remains an inexact science. Good search engine marketers consider the following basic techniques when planning and executing effective SEM programs:

– Pure search engine optimization programs – building web sites that successfully promote potential search terms for the top search engines and directories (Google, Yahoo, Inktomi).

– Paid initiatives – purchasing placement on the search engines can be effective and demonstrate clear ROI when done well. U.S. Bancorp Piper Jaffrey reports that spending in paid placement will grow to $1.8 billion this year in the U.S., compared with $419 million in 2002.

Specific programs depend on a company’s offerings and marketing objectives. Generating traffic and online prominence is typically a primary goal no matter what the nature of the organization. However, a professional services firm may measure success by the number of articles downloaded from its site while a widget company will be focused on actually selling product.

Case Study – ITW Thermal Films

ITW Thermal Films – a thermal transfer ribbon manufacturer and subsidiary of Fortune 200 company Illinois Tool Works (NYSE: ITW) – embarked on its search engine marketing program in early 2002. With formidable competitors like Datamax, Sato, and Sony aggressively vying for customers in its space, ITW Thermal Films needed to make sure it had the proper level of market visibility on the internet so prospects could easily find them. The SEM program delivered just that.

In February 2002, thirteen keywords or phrases were identified — following a market evaluation — as being important to ITW Thermal Films. Terms included the company’s name, “printhead saver,” and “thermal transfer.” The site was subsequently optimized for the identified words and phrases for search engine placement.

Analysis was conducted before and after the optimization effort to determine how frequently ITW Thermal Films appeared in top placement among the leading sixteen search engines. The results? ITW Thermal Films experienced a 20% increase in first page search engine appearances across the sixteen search engines, and a nearly 6-fold increase in site traffic.

While greater marketplace visibility is an important outcome of SEM efforts, the most practical benefit for ITW Thermal Films is new lead generation resulting from its efforts. Previously, the company had virtually no leads attributable to its online activities. After the optimization program ITW Thermal Films realizes several “hot” new leads per month from its internet initiatives. SEM, along with a strong web site, also positions the company favorably against larger competitors with bigger online marketing budgets.


Search engine marketing works hand-in-hand with a strong company web site and is a critical component to all online marketing efforts. Small and mid-sized companies can take advantage of this cost-effective technique to establish measurable competitive advantage. While big companies spend millions to develop their offline brands through costly media advertising, online brands can be nurtured for a fraction of the cost. When used effectively, SEM can attract prospects from around to the world to your organization and serve as a proactive lead generator.